Wednesday, May 24, 2017

Results-Based Funding Violates the Spirit (If Not the Letter) of Arizona's 1980 Funding Equalization Law

Hold onto your hats, ladies and gentlemen, I'm about to say something positive about the way Arizona funds education. We're number 15 in the nation in spending equalization across school districts. That means the difference between the highest and lowest spending districts is less than it is in 36 states. That's good news.

Now, here's the bad news you knew was coming. Our new results-based funding law is designed to reverse the state's equalization gains, increasing the funding differences between districts, mainly by giving big chunks of extra money to schools in high rent districts.

Here's the history. Before 1980, Arizona, like most states, gave each school district a minimum level of funding, and the rest came from local property taxes. If one district brought in lots of property tax money for education, its schools were well funded. If another district brought in less in property taxes, its schools were poorly funded. Naturally, that meant wealthy districts tended to have significantly better funded schools than poorer districts, though not always because they taxed themselves at a higher rate. A district with lots of expensive homes could bring in more money for schools with a lower dollars-per-thousand property tax rate than a district with lower value homes and a higher tax rate. Million dollar homes generate more in property tax funds than $100,000 homes, even if the high priced district has a lower tax rate. The best discussion of this subject is Jonathan Kozol's classic 1991 book, Savage Inequalities.

When a successful lawsuit in California in 1980 challenged the state's inequitable funding system and won, Arizona saw the writing on the wall and passed legislation to create an "equalizing" formula for its schools. The state became responsible for the funding, which meant property tax money dedicated to schools was doled out based on a complex per-student formula which took a number of factors into account to decide how much money would go to the education of each student. That's the system we have today. It's far from perfect, but it puts us at number 15 in the nation in funding equity.

Typically Arizona irony note: A Republican-majority state government put the 1980 equalization formula into place, so you wouldn't expect an increase in the total amount of education funding, but at least they'd keep the total spending constant, right? Wrong. They equalized education spending down. Before equalization, Arizona was at 87 percent of the national average in per student spending. After the change, it dropped to 81 percent. Our Republican elected officials have continued the pattern year after year, consistently lowering what we spend on our students compared to the rest of the country.

Our funding equalization system still has its inequities. Individual districts have ways to get more money for their schools than other districts. They can vote in local budget overrides. Taxpayers can give them more money through public school tuition tax credits. They can set up foundations which raise extra cash. All those ways to increase funding favor wealthy districts, of course. But even factoring in those kinds of disparities, Arizona ranks high in its school funding equity.

This year, the legislature and the governor found a way to violate the spirit of the 1980 decision to equalize school funding at the state level. It added $37.6 million for what it calls results-based funding, but the clear purpose of the new money is to give extra dollars to schools serving the state's most economically advantaged children. The equalization law is still intact, but Republicans have figured out how to circumvent it and slip some extra cash to favored schools.